Tipped off by the strong smell wafting into a suburban street, police in Rome have discovered a massive underground marijuana plantation in a disused railway tunnel built by Mussolini.

Police seized 340kg of marijuana – with a street value of €3m (£2.36m) – from the plantation, which was lit by powerful halogen lamps and hidden behind a legitimate mushroom-growing business at the entrance to the tunnel. A fake wall had been built with revolving breeze blocks to conceal the marijuana plants.

The scale of the 4,000 sq metres plantation, which contained 1,000 plants, a drying room for harvested plants and a vacuum-packing machine, has led investigators to suspect one of Italy's mafia groups was behind it – possibly the Neapolitan Camorra.

"We wore masks when we entered in to stop our heads spinning, I have never seen anything like it," said Stefano Corsi of Italy's tax police, which mounted the raid.

Built in the 1930s under the Tor Pignattara neighbourhood and close to underground vaults used by the Bank of Italy, the 800-metre stretch of tunnel was part of Mussolini's redevelopment of Rome, but was never used due to the outbreak of the second world war.

Entering the tunnel, police found the floor littered with plastic discs that snapped loudly underfoot – a rudimentary warning system for those inside. Police sniffer dogs were then pulled out of the tunnel as the growing smell of hundreds of plants became too strong for them.

"The high temperatures recently probably made the smell more intense," said one police official.

The owner of the mushroom-growing business was arrested, but no one was found working in the plantation, although police found masks, gloves, overalls and written instructions on how to manage the complex watering system used for the plants.